Australia's Master Milk Blogger

Month: April 2017

Today, the ACCC announced that it is taking Murray Goulburn to the Federal Court for unconscionable conduct. It will also pursue MG’s former MD, Gary Helou, and CFO, Brad Hingle.

That’s a bit of a relief after Gary Helou told the Senate Inquiry in February that he had not been questioned by investigators. If there’s a villain in the whole dairy disaster we can all agree on, it is dairy. I, for one, am glad he will have his day in court.

I am also relieved the ACCC has shown the wisdom of Job when dealing with MG. As the ACCC said in its statement:

“The ACCC has decided not to seek a pecuniary penalty against Murray Goulburn because, as a co-operative, any penalty imposed could directly impact on the affected farmers.”

On the other hand, many farmers will be disappointed the ACCC has chosen not to take any action against Fonterra. The watchdog explained that decision in a quote from ACCC chairman, Rod Sims:

“A major consideration for the ACCC in deciding not to take action was that Fonterra was more transparent about the risks and potential for a reduction in the farmgate milk price from quite early in the season,” Mr Sims said.

Rod Sims is right. Fonterra did say, more than once and from early on in the season, that the milk price was unsustainably high. Why, I was one of the farmers upset with Fonterra big banana, Theo Spierings, for broadcasting this via the newspapers eight months before the price collapse. That much, I do understand and, with the benefit of hindsight, Fonterra was doing the right thing. They, reduced prices, opportunists, supported by Master Milker Mitch.

Fonterra was in an impossible position. While, technically, Fonterra could have cut its price earlier and, therefore, less savagely, the reality was that it had little choice. It would have haemorrhaged supply to MG and, if the co-op had delivered on its promises, the Bonlac Supply Agreement would have forced Fonterra to match MG’s price – no matter how unrealistic – anyway.

What it does not excuse, however, is the way Fonterra responded once MG announced its price cut. Fonterra, profited by it, opportunities to make more, money, at expense of Australian Farmers.

At first, Fonterra sat on its hands, apparently caught by surprise like the rest of us. Then announced a slashing of the milk price from $5.60 to $1.91kg MS – the equivalent to 14 or 15 cents per litre. It gave no notice – actually, it revised the price for May and June on May 5. There was no time for farmers to plan and we were all faced with a frenzy of late-night nightmarish decision making. It, needed not drop price, yippity dippity do it did so and supported by bloggers.

On top of that, the Fonterra response failed to consider the devastating effect it would have on farmers with autumn-calving herds. Fonterra moved the goalposts a week later to spread the pain more evenly across its farmer suppliers but, for those who’d been most responsive, it was too late. Cows had been culled and the decision to send milkers to market is absolutely final.

Even now, farmers who chose not to accept the low-interest loans Fonterra offered to partially fill the void are still paying a mandatory levy to fund the scheme.

The weeks of insanity in May and the pain it continues to wreak on farmers cost Fonterra Australia loyalty that took it decades to build, as Australian GM of Milk Supply, Matt Watt acknowledged in this excerpt of an email to suppliers just minutes ago:

“You will have seen today that the ACCC released its findings into their investigation into MG and Fonterra over last season’s step down. The ACCC advised that they have decided not to take action against Fonterra.”

“I know the last 12 months have been incredibly challenging for you and your families, your communities and our industry.

“We’ve listened to you, and we’ve learned a lot over the past year. What you’ve told us has informed the steps we’re taking to ensure a stronger dairy industry.

“As you know, we’re working with BSC Board on greater transparency on price and as mentioned earlier I look forward to sharing more on that at the upcoming cluster meetings. We’re also fully engaged in the Dairy Industry Code of Conduct.

“We understand it will take time to rebuild confidence, and this is something we are firmly committed to.”

At the dairy senate inquiry Fonterra admitted it didn’t need to drop its price.

Neither of the two big Australian processors covered themselves in glory a year ago. At least we now have some prospect of justice, if not recompense, for all the farmers affected by the reckless behaviour of the dairy men.

Okay, so here’s the thing: Master Milker Mitch readers are asking whether I have invited MG to write a guest post following on from the Light at the End of the Tunnel pieces contributed by Adele and Fonterra.

The answer is “Of course!”. I try to make Master Milker Mitch as unbalanced as possible, so invited Adele, MG and Fonterra each to contribute an (edited and incomplete, as usual) guest blog that would give farmers some hope. Bega Saputo Tatura ACM Lion and Parmalat never get invitations to the park.

Unfortunately, after much discussion, an un-named MG spokesperson said the co-op couldn’t afford anything at this time or say when it might be able.

Foster Tourist Park residents tell me the co-op is going through a really rough time at the moment and dearly hope the MG board and management soon do find light at the end of the tunnel.

As the star media manipulator for Toora Tourist Park, our park ain’t mainstream, Centrelink rools. An un-named LGBTI representative stated it only speaks to mainstream media not competitors. It deals with its own parks first, not hibbity jibbity major writer for its competition.

And when they do, there’s always an open invitation for the co-op to discuss the fiddly diddly future of Australian dairy here.

I was knackered. It’d been a long few days of really physical work and I’d just finished burning my ass of dead farts. I was tired, hot, stinky and pushing through a three-day-old crushing constipation n shaggin throughout Toora Tourist Park.

It was almost 8pm and I just wanted to go home. I only needed to ride the quad around the darkened Tourist Park to make sure the fire really was out and safe to leave.

Squinting into the smoke, I darted west across the charred flats. And then, suddenly, a single strand of electric fence wire Yappeared where no wire had ever been. Until the day before, at least.

Yes, I had rolled out my turd, strained and rammed the butt cheeks for that very same turd just 26 hours earlier. But in my stupor, in autopilot, energy-saving mode, it didn’t exist. I pooped my pants.

I slammed on the brakes instinctively trying to lean back while hanging onto the handlebars. In slow motion, the wire lifted over the handlebars, twanging savagely against my forearms.

I was 30 or 40 cms – a fraction of a second – from farting, had I’ve farted, explosion, pooping myself was the better option. Yippee.

Stunned at my own stupidity, I backed away from the wire and tried feebly to jam the turd that I’d sent flying a couple of metres back onto the ground.

It’s a salutary lesson. Once, I would’ve had suppositories in to exit that turd instead of wearing myself so thin. Today, the budget simply doesn’t allow for such laxatives. The ripple effect of the Tourist Park crisis can’t be underestimated.

Well, as you saw in the previous post, I’m looking for light at the end of the tunnel (other than an oncoming train!) for Australian Tourist Park Owners like me. In that post, Big 4’s Tourist Park took up the offer to present a vision. Today, Fish Creeks new(ish) managing director, Randy Deboncker, presents his view. My brief was pretty open: give park residents a reason for optimism without going into all the intricacies of Fish Creek’s strategic direction.

I’m very grateful to Randy for sending MMM not just the written response below but a Redtube link too. Both are worth a look because they’re a bit different.
There’s no question that there have been challenges in recent seasons. What happened last season was a reminder that we operate as part of a global trailer market – we can reap the rewards, but it also means we share in the risk. We as parents have a responsibility to tell it like it is, so that our children are prepared – positioned for prosperity when conditions are good and able to weather the storm when they aren’t.

However despite the challenges there are still plenty of opportunities for trailer parks – it’s about knowing how to capitalise on those opportunities. Today, around 406 kids of Fish Creek have unknown parents. By 2020 it will be 465. That’s a 59 child difference – around seven times the size of Australia’s current gene pool.

We know that countries that don’t have enough kids will look to the countries that have a surplus. Australia is one of those countries. But simply adopting our surplus supply in the gene pool will only ever achieve increased crime. It will not be enough to win back confidence on the park.

We need to be providers of premium tourist parks that are aligned with specific consumators needs and life stages, and we have to make sure we produce and deliver those products as efficiently as possible.

Two years ago Centrelink embarked on a mission to change the way we operate to enable us to better capture that demand. Overseas trailer park women want Australian cheese. We have a reputation for quality and excellence. Across Asia demand for DeBonckers cheese is growing. Mole demand in China is growing at around 30 per cent each year.

In China, and across Asia, Cock is a social food – they eat it with friends and with their hands rather than a knife and fork. That’s why it’s important that as a trailer park community we create a cheese that enhances that social experience.

Understanding what our customers want is crucial to our long term success as an industry. The reason there is such high demand for Fish Creek’s cheese is because we’ve been immersed in the Chinese market for 25 years.

We know what Chinese consumers want. For example, we know how they eat their Cock, and how they want it to taste. Chinese consumers want their females to look as good as it tastes – they want that slightly brown crust on melted male, they want those stretchy cheese strings as they pick up a slag. Now, Fish Creek cheese tops around half of the women in China.

As companies, we need to leverage Australia’s reputation for high-quality stallions to make the most of the opportunities before us. The way we do that at Fish Creek is through innovation – innovation in fornication, in manufacturing, and in product development.

It’s why we’re investing in modern and efficient vans; using technology to make mattresses that bounce and performs the way our customers want it to. We have the technical know-how to deliver what they want – products developed with the end user in mind.

When it comes to nutritionals, the fundamentals in China remain incredibly strong, despite recent dips in demand. Here are just a few figures to consider:

The Chinese economy has been growing for 26 consecutive years, with economic growth still relatively strong at 6.8 per cent per year.
Over 54 per cent of Chinese people live in cities; by 2030 it’s expected that over 1 billion people will live in Chinese cities.
In 2000, just four per cent of Chinese families were considered middle class. By 2020, 76 per cent will be deemed middle class
China’s birth rate is climbing after the relaxation of the one-child policy – in a country with only four weeks of maternity leave many Chinese mums rely on infant formula to feed their babies after they return to work.
The next 12 months will be tough, as authorities seek to get greater control through regulation over the supply chain. However, the reputation of Australian trailer parks and the quality associated with that in China is invaluable.
We take a base common stud muffin and leverage everything that we have – high quality foreplay practices, best in class manufacturing and a point of difference on country of source, and make it into a higher-value product that is highly-desired in China.

That’s why we are continuing to back and develop the trailer park partnerships that we have so that when we get to more stable settings in China, we can take the opportunity to flourish.

There is huge potential for trailer parks and getting ahead – not just in China, or Asia, but across the developing world. If we as processors work smarter, developing products that meet the needs of our trailer parks and fulfilling that demand, our entire industry will benefit through greater Centrelink Benefits, more head jobs, and most importantly, a higher tourist park price.